2024 (2) TMI 1361 - HC - GST

Bombay HC orders refund of tax deposited under cancelled GST registration after chartered accountant's inadvertent filing

Bombay HC allowed petition for refund of tax deposited under cancelled GST registration. Petitioner's chartered accountant inadvertently filed return and ... Refund of tax erroneously paid under cancelled GST registration - inadvertent / bona fide mistake in filing returns - validity of returns filed under a cancelled registration - limitation under Sections 107(1) and (4) of the CGST Act - effect of online filing where procedural deficiencies exist - procedural deficiency cannot defeat substantive remedyRefund of tax erroneously paid under cancelled GST registration - validity of returns filed under a cancelled registration - inadvertent / bona fide mistake in filing returns - Refund claim in respect of tax deposited under a cancelled registration was allowable and such deposit could not be retained by the revenue. - HELD THAT: - The Court found on the facts that the petitioner's earlier registration had been cancelled on 1st January 2019 and a fresh valid registration was granted on 26th March 2022. Identical returns were filed and identical tax amounts were deposited under both the cancelled and the valid registration due to an inadvertent bona fide error by the petitioner's chartered accountant. A return filed under a registration that was non-existent could not give legal effect to any tax purportedly deposited thereunder; such deposit was not a tax collection under authority of law and therefore could not be lawfully retained by the respondents. The authorities below erred in refusing the refund without confronting these factual and legal realities. The petitioner was accordingly held entitled to refund of the amount paid under the cancelled registration, together with permissible interest, and the direction for refund was issued to the assessing authority. [Paras 13, 14, 15]The refund of the amount deposited under the cancelled registration is allowed and the amount, with permissible interest, is to be refunded.Limitation under Sections 107(1) and (4) of the CGST Act - effect of online filing where procedural deficiencies exist - procedural deficiency cannot defeat substantive remedy - Appeal filed online within the prescribed limitation could not be rejected as time-barred on account of procedural deficiencies in furnishing physical documents. - HELD THAT: - The appellate authority recorded that the appeal had been filed online within four months of the impugned order but rejected the appeal on a technical ground that physical copies or certain uploaded documents were deficient. The Court held that once an appeal is registered on the online portal within the statutory period, minor or curable deficiencies in filing or in physical documents cannot be allowed to convert a timely filing into a time-barred one. Procedural non-compliances that are curable must be permitted to be rectified and cannot defeat the substantive right to seek redress. The appellate authority's hyper-technical approach in treating the registered online appeal as barred by limitation was contrary to the statutory scheme and resulted in denial of justice; accordingly the impugned appellate rejection was quashed. [Paras 15, 16]The rejection of the appeal as barred by limitation for non-furnishing of physical documents was held to be unsustainable and set aside.Final Conclusion: Both the order rejecting the refund application and the appellate order dismissing the appeal as barred by limitation were quashed; the petitioner is entitled to a refund of the amount erroneously deposited under the cancelled registration together with permissible interest, to be paid within four weeks. Issues:The judgment involves a Petition under Article 226 of the Constitution of India challenging an order rejecting a refund application for tax deposited under a cancelled GST registration number.Summary:The Petitioner, a scriptwriter, had two GST registration numbers, one cancelled and one new. The Petitioner's Chartered Accountant mistakenly deposited tax under the cancelled registration number, leading to a refund application rejection. The Assistant Commissioner and the appellate authority rejected the claim based on procedural grounds, stating the appeal was filed beyond the limitation period. The High Court found that the tax deposited under the cancelled registration was not valid and ordered a refund of the amount deposited under the cancelled registration number.The Court held that the Petitioner was entitled to a refund as the tax deposited under the cancelled registration was not legally valid. The authorities failed to consider that the Petitioner's first registration was cancelled, and the tax return filed under it was void. The appellate authority's hyper-technical view on the limitation period for filing the appeal was deemed incorrect. The Court emphasized that procedural deficiencies should not bar a validly filed appeal within the limitation period. The judgment quashed the previous orders and directed the refund of the tax amount deposited under the cancelled registration number, along with interest, within four weeks.